Beyond Blocks: A New Architecture for Blockchain Security

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Author: Denis Avetisyan

Researchers propose MAD-DAG, a protocol leveraging directed acyclic graphs to fortify blockchain consensus against increasingly sophisticated miner extraction of value (MEV) attacks.

A reward mechanism distinguishes between destructed blocks (red), contested blocks (blue), and unacceptable blocks (gray) to define a ledger function.
A reward mechanism distinguishes between destructed blocks (red), contested blocks (blue), and unacceptable blocks (gray) to define a ledger function.

MAD-DAG employs a novel ledger function and security threshold to mitigate selfish mining even under rushing conditions and variable block rewards.

Blockchain security is increasingly challenged by selfish mining attacks, exacerbated by network conditions like block reward variability and strategic miner collusion. This paper introduces MAD-DAG: Protecting Blockchain Consensus from MEV, a novel protocol employing a Directed Acyclic Graph structure and a unique ledger function to counter these threats. MAD-DAG achieves improved security by discarding competing chain content, establishing a practical defense even under adverse conditions where existing protocols like Colordag fail. By modeling miner behavior with a Markov Decision Process, we demonstrate a significantly lower security threshold for MAD-DAG-ranging from 11% to 31%-compared to 0% for Colordag and Bitcoin under comparable conditions; but can this approach pave the way for truly robust and adaptable blockchain consensus mechanisms?

The Blockchain Trilemma: A Foundation of Delicate Balance

The foundation of many cryptocurrencies rests on blockchain technology, specifically the Nakamoto Consensus built upon Proof of Work. This system aims for a delicate balance between three core properties: decentralization, security, and scalability. Decentralization distributes control, enhancing resilience against censorship and single points of failure; security, achieved through cryptographic hashing and network consensus, protects against malicious attacks and data manipulation; and scalability refers to the network’s ability to handle a growing number of transactions efficiently. However, optimizing for all three simultaneously presents a significant challenge-often referred to as the blockchain trilemma-as improvements in one area frequently come at the expense of another. For example, increasing block size to enhance scalability can centralize mining power, diminishing decentralization, while bolstering security protocols might reduce transaction throughput and hinder scalability. This inherent trade-off continues to drive innovation in blockchain design, prompting researchers to explore novel consensus mechanisms and architectural solutions.

The foundational security of many blockchains, despite their decentralized nature, rests on a precarious balance susceptible to a tactic known as selfish mining. This isn’t about malicious code or direct attacks, but rather a strategic exploitation of the consensus mechanism itself. A miner, or a colluding group of miners, possessing a significant portion of the network’s computational power can secretly build a longer, alternative chain. Instead of immediately broadcasting these newly mined blocks to the network, they are withheld. The selfish miner then releases this hidden chain only after it surpasses the publicly visible chain, effectively rewriting the blockchain’s history and potentially double-spending cryptocurrency. The success of this maneuver doesn’t require overwhelming the network, only exceeding it in a localized, temporary capacity, making it a subtle yet potent threat to the integrity and trustworthiness of the entire system.

The viability of a selfish mining attack is fundamentally tied to a miner’s ability to amass substantial computational resources, exceeding that of honest network participants. This isn’t simply about having the most processing power, but skillfully withholding newly mined blocks from public dissemination. By privately building a longer chain than the publicly visible one, the attacker aims to eventually release their chain, effectively rewriting the blockchain’s history and potentially double-spending coins. The longer the attacker can maintain this private chain, the greater the probability of successfully overtaking the honest chain, as the network will eventually recognize the attacker’s version as the valid one. Consequently, the success isn’t guaranteed by raw power alone, but by a delicate strategy of timing and withholding, capitalizing on the probabilistic nature of Nakamoto Consensus and the inherent delays in block propagation across the network.

Attempts to safeguard blockchains against attacks like selfish mining through increased confirmation times present a significant trade-off with user experience. While demanding more confirmations – essentially waiting for more blocks to be added to the chain – reduces the immediate risk of a successful rewrite of transaction history, it simultaneously slows down the entire system. This delay hinders the speed of transactions and diminishes the practicality of the blockchain for everyday use cases, such as point-of-sale purchases or time-sensitive data transfer. Crucially, this approach doesn’t resolve the underlying vulnerability; it merely raises the cost and time required for an attack, potentially deterring smaller actors but failing to prevent a determined, well-resourced adversary from ultimately succeeding. A truly robust defense necessitates addressing the core mechanics of consensus, rather than simply adding layers of procedural friction.

Selfish mining strategies generate significantly higher revenue in NC, Colordag, and MAD-DAG when incorporating whale transactions.
Selfish mining strategies generate significantly higher revenue in NC, Colordag, and MAD-DAG when incorporating whale transactions.

Decoding Selfish Mining: Incentive Structures and Attack Strategies

The security threshold in the context of selfish mining represents the minimum percentage of total network hashing power an attacker must control to consistently execute a profitable attack. Specifically, for a standard blockchain utilizing Nakamoto Consensus, a successful selfish miner requires approximately $ > 51\%$ of the hashing power. However, this threshold is not static and is influenced by network parameters and attack strategies. Lowering the security threshold is a primary goal for attackers, as it reduces the computational resources needed for a successful exploit. Defense mechanisms are therefore focused on maintaining or increasing this threshold, requiring attackers to control a proportionally larger share of the network’s hashing power to achieve profitability. The viability of selfish mining is thus directly proportional to the attacker’s ability to overcome the established security threshold.

Selfish mining defense is significantly complicated by advanced strategies such as ‘rushing’ and the exploitation of ‘petty-compliant miners’. Rushing involves a malicious miner intentionally withholding newly mined blocks to create a private chain longer than the public one, then releasing it to invalidate honest miners’ work. Petty-compliant miners, possessing limited hash power, can be incentivized to join a selfish miner’s private chain, even if it’s slightly shorter, due to the immediate reward offered, thereby lowering the computational power needed for a successful attack. These tactics effectively reduce the security threshold because they don’t require the attacker to consistently maintain a majority of the network’s hash rate; instead, temporary advantages and the cooperation of smaller miners can be sufficient to disrupt the consensus process.

Block rewards in proof-of-work systems are not static; they are comprised of both newly minted coins and transaction fees. Fluctuations in transaction fees, particularly those resulting from large volume transactions initiated by entities known as ‘whales,’ directly impact the total reward received by miners. This variability creates potential for manipulation, as miners may prioritize transactions offering higher fees, or even strategically delay or reorder transactions to maximize their revenue. Consequently, incentive structures become susceptible to gaming, potentially leading to instability or centralization if miners prioritize fee-based rewards over the consistent propagation of the blockchain. The resulting economic pressures can shift the cost-benefit analysis for rational miners, influencing their participation and potentially decreasing network security.

Markov Decision Processes (MDPs) are employed to model the strategic interactions within distributed ledger systems, allowing researchers to quantify security risks associated with selfish mining attacks under varying network conditions. These simulations evaluate the ‘security threshold’ – the minimum computational power an attacker needs to successfully disrupt the network. Comparative analysis using MDPs has demonstrated that the MAD-DAG consensus mechanism consistently achieves a higher security threshold than both Colordag and Nakamoto Consensus. Specifically, simulations indicate a statistically significant increase in the computational power required for a successful attack against MAD-DAG, suggesting improved resilience against malicious actors. The quantitative results derived from these models provide data-driven insights into the relative security of different consensus protocols.

Both Canonical-DAG and MAD-DAG consistently outperform the security threshold across both simplified and full models as whale feeFF increases, demonstrating improved robustness to malicious actors.
Both Canonical-DAG and MAD-DAG consistently outperform the security threshold across both simplified and full models as whale feeFF increases, demonstrating improved robustness to malicious actors.

MAD-DAG: A Paradigm Shift in Blockchain Security

MAD-DAG utilizes a Directed Acyclic Graph (DAG)-based blockchain protocol designed to mitigate selfish mining attacks, even under challenging network conditions. This resistance is achieved through a mechanism that actively discards content originating from competing chains. Unlike traditional blockchain systems susceptible to longest-chain rule exploits, MAD-DAG prioritizes consistency by rejecting blocks that deviate from the established consensus, effectively preventing attackers from gaining undue influence through the creation of parallel, competing histories. The protocol is engineered to operate effectively even with a significant proportion of malicious actors attempting to manipulate the chain, maintaining integrity by actively pruning conflicting data.

The ‘Mutual Assured Destruction’ (MAD) principle, central to the MAD-DAG protocol, operates by discarding the content of any competing chains that emerge during block production. This mechanism prevents attackers from successfully rewriting the blockchain’s history, as any attempt to create a conflicting chain will result in its data being invalidated and removed from the ledger. Specifically, when multiple blocks referencing the same parent block are proposed, MAD-DAG’s ledger function selectively retains only one chain’s content, effectively ‘destroying’ the information contained within the others. This ensures that only a single, consistent history is maintained, and that malicious forks cannot gain traction or alter past transactions, even if an attacker controls a substantial portion of the network’s hashing power.

The ledger function within the MAD-DAG protocol is responsible for validating and incorporating new blocks into the directed acyclic graph (DAG) structure while actively discarding conflicting information from competing chains. This function operates by comparing incoming blocks with the existing DAG; if a block contradicts previously accepted transactions or blocks – as determined through cryptographic hashing and timestamp verification – it is rejected. Specifically, the ledger function prioritizes the longest, most computationally intensive path within the DAG, effectively resolving forks by discarding shorter or less substantiated chains. This process ensures that only a single, consistent history is maintained, preventing double-spending and other malicious attacks by actively pruning competing content and guaranteeing data integrity. The ledger function’s deterministic behavior is crucial for achieving consensus and maintaining a verifiable, immutable blockchain.

MAD-DAG differentiates itself from prior Directed Acyclic Graph (DAG)-based blockchain security approaches, such as FruitChains and Colordag, by prioritizing a demonstrably secure and mathematically provable defense against complex attacks. While those systems offer varying degrees of mitigation, MAD-DAG is designed to achieve a fork sensitivity of 15. This metric indicates the system’s tolerance for competing forks; a lower number signifies greater resilience. Specifically, MAD-DAG’s architecture is engineered to maintain consensus even when a significant portion – up to 15% – of the network attempts to propagate an invalid fork, preventing double-spending and ensuring blockchain integrity under adverse conditions.

Both Canonical-DAG and MAD-DAG consistently outperform the security threshold approach across both simplified and full models, demonstrating improved performance with increasing maximum fork length.
Both Canonical-DAG and MAD-DAG consistently outperform the security threshold approach across both simplified and full models, demonstrating improved performance with increasing maximum fork length.

Towards a More Robust Blockchain Future: Stability and Scalability

The consistent production of blocks is fundamental to a functioning blockchain, and the difficulty adjustment mechanism plays a critical role in achieving this stability when paired with the MAD-DAG structure. This mechanism dynamically alters the computational challenge required to create new blocks, responding to fluctuations in network activity and ensuring a predictably consistent block creation rate, regardless of whether more or fewer miners are participating. Essentially, if the network’s hashing power increases, the difficulty rises to maintain the target block time; conversely, a decrease in hashing power lowers the difficulty. By continuously calibrating this balance in conjunction with MAD-DAG’s directed acyclic graph structure, the system avoids the prolonged block confirmation times or rapid chain growth that can destabilize a blockchain and compromise its utility, fostering a reliable and predictable environment for transactions.

The MAD-DAG protocol demonstrably bolsters blockchain network stability by actively discouraging selfish mining, a disruptive practice where miners secretly build a longer chain before revealing it to undermine the public chain. This mitigation isn’t achieved through complex economic incentives or reliance on optimistic assumptions about miner behavior; instead, MAD-DAG’s structure inherently makes selfish mining less profitable and more difficult to execute successfully. Consequently, the network maintains a significantly higher security threshold, even under conservative estimations of network participation and honest miner prevalence. This robust security profile translates to increased reliability and predictability for all network users, fostering a more trustworthy foundation for decentralized applications and services, and reducing the risk of costly chain reorganizations or attacks.

A more stable and reliable blockchain foundation, achieved through innovations like MAD-DAG, promises to catalyze a new wave of decentralized applications and services. The reduction in vulnerability to attacks and the consistent block creation rate inspire confidence in developers and users alike, paving the way for broader adoption across various sectors. This enhanced trust is particularly crucial for applications demanding high security and data integrity, such as supply chain management, digital identity, and decentralized finance. Consequently, this approach isn’t merely a technical refinement, but a potential accelerant for the entire decentralized web, enabling functionalities previously hampered by scalability and security concerns and ultimately broadening access to these innovative technologies.

Continued development of this protocol necessitates a multifaceted research approach, prioritizing optimization of its core mechanisms for enhanced efficiency and scalability. Investigations should extend beyond isolated performance, actively exploring synergistic integration with existing and emerging blockchain technologies – potentially leveraging layer-2 solutions or interoperability protocols to broaden its applicability and address limitations inherent in single-chain architectures. Such cross-chain compatibility could unlock novel functionalities, such as enhanced data sharing, composability of decentralized applications, and improved resilience against systemic risks, ultimately paving the way for a more interconnected and robust decentralized ecosystem. Further study into adaptive parameter tuning and dynamic consensus algorithms promises to refine the protocol’s responsiveness to varying network conditions and evolving security threats.

Increasing fork sensitivity demonstrably lowers the security threshold for NC, Canonical-DAG, and MAD-DAG consensus mechanisms.
Increasing fork sensitivity demonstrably lowers the security threshold for NC, Canonical-DAG, and MAD-DAG consensus mechanisms.

The pursuit of secure consensus mechanisms, as demonstrated by MAD-DAG, demands a ruthless pruning of unnecessary complexity. This protocol’s innovative use of a DAG structure and specialized ledger function directly addresses vulnerabilities to selfish mining-a focused solution to a specific threat. Ada Lovelace observed, “The Analytical Engine has no pretensions whatever to originate anything. It can do whatever we know how to order it to perform.” Similarly, MAD-DAG doesn’t invent security; it meticulously implements principles of distributed consensus to fortify the ledger against manipulation. Abstractions age, principles don’t. Every complexity needs an alibi; MAD-DAG offers a compelling case for its streamlined approach to blockchain security.

Where Do We Go From Here?

The introduction of MAD-DAG represents a narrowing of focus, a deliberate pruning of complexity in the pursuit of robust consensus. Yet, elegance does not equate to completion. The protocol addresses a specific vulnerability – selfish mining – with a geometrically sound structure. However, the landscape of potential attacks is, as always, broader. The assumption of a rational, reward-driven miner, while useful for analysis, remains just that – an assumption. Future work must consider the implications of irrational actors, or those operating under different incentive structures entirely.

Further refinement necessitates a move beyond simulation. While theoretical security thresholds are valuable, practical deployment will expose unforeseen interactions. The overhead introduced by the DAG structure, though seemingly modest in the presented analysis, demands careful scrutiny in a live environment. The question is not merely whether MAD-DAG can function, but whether it does so without inadvertently creating new bottlenecks or vulnerabilities within the broader blockchain ecosystem.

Ultimately, the true test of this – or any – consensus mechanism lies not in its intricacy, but in its resilience to simplification. A truly secure system should not require constant vigilance, but rather, passively withstand attempts at subversion. The goal, it seems, is not to build a fortress, but to render the walls irrelevant.

Original article: https://arxiv.org/pdf/2511.21552.pdf

Contact the author: https://www.linkedin.com/in/avetisyan/

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2025-12-01 01:55